Good afternoon ladies and gentlemen. At this time I would like to welcome everyone to the OraSure Technologies 2009 Second Quarter 2009 Financial Results Conference Call and Simultaneous Webcast. (Operator Instructions). Now for opening remarks and introductions I would like to turn the conference over to Miss Judy Clarke at OraSure Technologies. Please go ahead Judy.

Thank you. Good afternoon everyone and thank you for joining us today. I would like to begin by telling you that OraSure Technologies issued a press release at approximately 4:00 pm Eastern time today regarding our 2009 second quarter financial results and certain other matters. The Press Release is available to you on our website at www.orasure.com or by calling 610-882-1820. If you go to our website the press release can be accessed by opening the Investor Relations page and clicking on the link for news releases. This call is also available real time on our web site and will be archived there for seven days. Alternatively, you can listen to an archive of this call until midnight August 12, 2009, by calling 888-203-1112 for domestic or 719-457-0820 for international. The access code is 4031205. With us today are Doug Michels, President and Chief Executive Officer and Ron Spair, Chief Financial Officer and Chief Operating Officer. Doug and Ron will begin with opening statements which will be followed with a question-and-answer session. Before I turn the call over to Doug, I must also remind you that this call may contain certain forward-looking statements including statements with respect to revenues, expenses, profitability, earnings per share and other financial performance, product development performance, shipments and markets, clinical studies and regulatory filings and approvals. Actual results could be significantly different. Factors that could affect results are discussed more fully in the SEC filings of OraSure Technologies including its registration statements, its annual report on Form 10-K for the year ended December 31, 2008, its quarterly reports on Form 10-Q and its other SEC filings. Although forward-looking statements help to provide complete information about future prospects, listeners should keep in mind that forward-looking statements may not be reliable. The company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after this call. Also, please note that today’s results will include a discussion of certain non-GAAP financial measures. Non-GAAP reporting is provided to help you better understand our business and certain items which impacted our results; however, non-GAAP financial results are not meant to be considered as a stand-alone measurement of performance or as a substitute for, or as superior to GAAP results. You should be aware that non-GAAP measures have inherent limitations and should be used only in conjunction with OraSure’s consolidated financial statements prepared in accordance with GAAP. Our press release includes a table detailing the non-GAAP measures together with the corresponding GAAP results and a reconciliation to GAAP. We encourage listeners to review these items. With that I would like to turn the call over to Doug Michels.

Thank you Judy and good afternoon everyone and welcome to our Second Quarter 2009 Earnings Conference Call. Ron will begin with an overview of our financial performance for the quarter and then we will provide financial guidance for the third quarter. After Ron’s review I will describe the progress we are making on the Company’s major clinical development programs and provide some more general business updates. We will conclude by opening the floor for your questions. Before Ron begins however, I would like to provide some context for today’s call and our performance during the first half of this year. As you know we had a good first quarter. We exceeded our guidance on both the top and bottom lines primarily because of the performance of our infectious disease business. A major factor contributing to this success was the extremely smooth and successful transition from our distribution arrangement with Abbott to a direct sales model in the United States hospital market. During the second quarter we encountered some challenges. As previously announced, based on feedback received from the FDA it became clear that our two principle clinical programs will require some more work and consequently the expected timing of FDA approval is delayed. In addition, we experienced difficulties manufacturing our OraQuick HIV test. This latter circumstance caused a reduction in inventory levels, negatively impacted our financial results, and prevented us from meeting our guidance for the second quarter. As indicated in our Press Release today, the manufacturing issue has now been resolved and we have resumed full-scale production of this product. While we are disappointed with the pace of our clinical programs and with the manufacturing challenges, we remain optimistic about the future of OraSure Technologies and I believe our investors should feel the same for several reasons. Despite the…

Thanks Doug. Good afternoon everyone. Let’s start with revenues. Second quarter 2009 revenues were $27.3 million representing a 9% decrease from the $18.9 million reported in 2008. Increased sales of our OTC cryo products were more than offset by decreased sales of our OraQuick ADVANCE rapid HIV-1/2 antibody test, our professional cryosurgical product, and our substance abuse testing products. We also experienced a decrease in licensing and product development revenue. As a result of inventory shortages of our OraQuick ADVANCE test we closed the second quarter with an order backlog of $2.2 million. Had we been able to fill these orders our revenue for Q2 would have approximated $19.5 million exceeding both our guidance and last years second quarter revenues. The overall 6% decrease in our infectious disease revenues in the second quarter of ’09 were the result of a decline in sales of our OraQuick ADVANCE test in the public health and international markets. This decrease is directly related to inventory shortages we experienced in the current quarter as a result of a manufacturing challenge related to our OraQuick ADVANCE test. Sales to public health decreased 16% from the second quarter of 2008. At the end of the quarter we had a $1.8 million backlog of orders for our OraQuick ADVANCE test from our public health customers. Had this manufacturing issue not occurred our second quarter revenues in the public health market would have resulted in an increase of 10% over the second quarter of 2008. International OraQuick revenues declined 29% as a result of lower sales into Africa primarily due to the timing of certain testing initiatives and the related OraQuick product orders. We do expect sales in Africa to improve from current levels during the remaining six months of 2009. Lastly, sales into the hospital market increased…

Thanks Ron. Before I discuss our clinical programs I want to address the update on the manufacturing issue which we faced during the second quarter and which is outlined in our earnings release today. As previously announced during the second quarter, our OraQuick inventory levels were reduced and we were forced to allocate product to our customer base as a result of difficulties manufacturing a component for the OraQuick HIV test that met our internal quality requirements. I am pleased to report that we have resolved this issue. A root cause has been identified and we have implemented the necessary corrective actions to remedy the situation. The primary problem has been traced to contamination from specific batches of latex gloves that interacted with a component in our test during the manufacturing process. This problem was extremely difficult to identify and isolate because the contamination was experienced only on an intermittent basis within certain batches of gloves. The problem was identified, contained, and remedied as part of our routine in process quality control testing ensuring that any OraQuick product released to the field met our quality standards. We are now back to producing OraQuick HIV tests at full scale and we expect to fill the backlog of orders and return to normal inventory levels over the next couple of months. Now moving on to the program updates. Starting first with our pre-market approval or PMA application for an OraQuick HCV test, there have been a number of developments since our last earnings call. As previously announced the FDA recently made it clear that some additional clinical testing will be required to obtain approval for a venous whole blood claim and that we have to conduct additional clinical studies to obtain approval of claims for oral fluid and other sample types. The…

(Operator Instructions) Your first question comes from Aaron Lindberg with William Smith & Company. Aaron Lindberg - William Smith & Company : How much is the current ADVANCE backlog?

It is $2.2 million at June 30th. Aaron Lindberg - William Smith & Company : How about now?

It’s actually increased a bit as a result of orders that we received in the international market place. Domestically I would say we’re around the same level as we just resolved this manufacturing issue a couple of weeks back. Aaron Lindberg - William Smith & Company : Okay so that takes care of that question. That was just wrapped up kind of mid-July end of July?

That is right. Aaron Lindberg - William Smith & Company : Okay and then you had said that you expect to work it off over the next couple of months, two to three months is that reasonable?

That is certainly a plan. We need to ramp up our manufacturing capacity through the addition of temporaries coming in to help us on the assembly operations and we need to get them trained, shifts expanded, and we are working diligently to make that happen while all the while making sure that we keep our eye on the quality of the product that we’re turning out to the field. So, we are ramping that up and we hope to move through that backlog as quickly as possible. Aaron Lindberg - William Smith & Company: Okay that sounds good, so primarily through shift expansions though?

That is correct. Aaron Lindberg - William Smith & Company : Okay and then what was the year-over-year unit change in ADVANCE sales to hospitals in Q2? I know you had said in Q1 it was pretty flat.

On an as adjusted basis with the backlog accounted for we were within a few percentages where we were on a unit basis on out sales in the prior year’s quarter. Aaron Lindberg - William Smith & Company : Okay so including the backlog similar and then when you take all of the backlog sales out it is obviously just down?

That is right. Aaron Lindberg - William Smith & Company : Okay got it and then can you give us an update on legislation related to the funding of HCV testing kind of like you did for HIV last quarter?

Yes, you know there is a lot going on on the HIV front obviously, in the appropriations bills the Center Appropriations Committee, as an example. On the HIV front the bill provides for approximately a $20 million increase for HIV aids to the HCV the bill was flat funded for HCV. That was the senate version. The house version I think was comparable, but I am not certain off the top of my head. Aaron Lindberg - William Smith & Company : Is there anything else going on just as far as broad legislative efforts to increase HCV testing?

We are working very hard to raise this issue with the legislative community obviously. We are working together with our colleagues in the pharmaceutical industry to make sure that those individuals making the policy decisions understand the importance of early diagnosis and as I mentioned the facts are the facts. Early diagnosis leads to earlier treatment; earlier treatment has a 2-x improvement in response rates, so we are trying to make that visible and see if we can’t positively impact the funding equation. Aaron Lindberg - William Smith & Company : Okay, so as far as just funding for HCV testing generally speaking though the primary driver is going to be the pharmaceutical companies coming out with new therapeutics versus anything on the government side?

No, I think the government is keenly interested in seeing increased HCV testing. Obviously the more effective therapies are going to drive more interest there as well. Aaron Lindberg - William Smith & Company : Okay and then can you give us an update on distribution strategies for ADVANCE outside of the US, particularly in developed countries Europe, Japan, the Middle East?

Yes, as you know we have been working on this for quite some time. Not only do we have to have the right distributors in place, but in most cases the product has to be registered. Often times each of these countries have validation requirements as well as testing algorhythms that we need to be placed on. Obviously we are working very hard to meet all of those requirements. In Africa, as an example, we are looking to have the testing algorhythms in Kenya be modified so that oral fluid testing can be part of that routine testing algorhythm. We have appointed a new distributor in South Africa. We have appointed new distributors in India and Viet Nam, we have a very exciting opportunity in Indonesia that we are working on right now. In Latin America we have been given a go ahead by the ethical committee in Brazil to have the HIV authority begin their validation of OraQuick so there is a lot going on, on multiple fronts. Aaron Lindberg - William Smith & Company : I wanted the developed countries.

In the developed countries we continue to advance our efforts in Europe, that has been a little bit slower, as you know, then we would like, but we continue to push hard in the big five of the EU and then moving over into some countries in Eastern Europe. Aaron Lindberg - William Smith & Company : Okay, and what is your plan for buying back stock?

We evaluate that from time to time with our board of directors and we will be doing that later this month. In the second quarter we did not buy any stock in the open market. Aaron Lindberg - William Smith & Company : Okay so it has kind of been put on hold, I think it was a $25 million original authorization and you did $5 million or so of it and then it is kind of just on the back burner for a little bit here?

During the second quarter we didn’t buy any stock, as I had indicated, and that is something that we evaluate on a quarterly basis with our board of directors. Aaron Lindberg - William Smith & Company : Okay and my last question is on stability testing for the HIV product. I appreciate the 16-month update on HCV, are you in a similar position with HIV?

We are not quite at the 16-month stage with that. As you know we extended our dating to 12 months earlier this year. We do have an additional stability test on stability. We are at about 11 months on that right now. We expect that is going to continue to extend and obviously as it passes the 12 month period and we get sufficient extension to increase the dating on HIV we will If we look at the stability profile of the product as it is currently on stability we are highly confident that we are going to be able to extend the dating of our HIV products some time down the line. Aaron Lindberg - William Smith & Company : Okay, great. Thanks a lot.

Your next question comes from Sameer Harish with Needham & Company, LLC. Sameer Harish - Needham & Company, LLC : I have a question on the VA contracts that you guys were talking about. Is that going to be under the direct hospital sales align or are you going to be reporting that in public health?

No, it would be under the hospital line. Sameer Harish - Needham & Company, LLC : Can you talk about, is the contract going to be hospital by hospital, or are you talking more to the VA as a general? I am asking to get a sense of whether or not you are going to see any price concessions for volume at the VA or not?

The way that the VA contracts are they either do it at the hospital or at the VISM level. The VISM is the integrated network; I think there are 23 VISMs’ within the VA health system. Also within a VISM in addition to hospitals are community based outpatient clinics and other types of healthcare service organizations, substance abuse services and the like. But, our focus is obviously going to be certainly at the VISM level, you know those 23 or so, then at the hospital level and then going down to the community based outpatient clinics. The VA purchases off of a federal supply schedule which we have had for several years. We do business today with many VA hospitals and with several VISMs and we expect that this change in policy and in the law actually is going to really open up significant opportunities within the VA. Most importantly it is going to provide the VA the opportunity to provide the same level of HIV prevention services to veterans that we in the public sector take for granted. Sameer Harish - Needham & Company, LLC : But when you look at the VA market, the potential there and the market penetration that you have today, what would you say our penetration is in the VA?

Well it is, I would say, somewhat representative of our penetration into the general hospital market where I believe we have a strong share position, but at the same time the VA has not been able to implement routine HIV testing programs. They were precluded by law. If the VA wanted to go out and implement broad scale HIV screening programs or testing programs they had to get an act of congress, congregational approval to do that. That law requiring that was actually repealed late last year. What had to happen though was the VA had to change their internal policies which were obviously aligned to deal with law. What the VA recently announced is that they have now modified their internal policies opening the opportunity for routine HIV testing as I described previously. It is a great opportunity and there is about 168 hospitals within the VA healthcare system and they are organized, like I said, into these 20+ VISMs. Sameer Harish - Needham & Company, LLC : Okay, now I wanted to focus a little bit on the guidance. How much of that $2.2+ million backlog is included in the third quarter guidance?

There is an amount of it, but I don’t want to leave you with the impression that it is all in there, but we want to be a little conservative as to how we plan for the ramp up in manufacturing as well as in servicing our existing customer base and the orders that come in. I think what I will share with you is that we do expect sequential decreases in the SAT as well as the overall cryo area which is also factored into the guidance on the revenue on the top line that we put out there for you. Sameer Harish - Needham & Company, LLC : Does that have more to do with seasonality?

Certainly in the SAT business it is related to that and I think as we talked about earlier, you know the continuing challenges with SSL over in the OTC marketplace in Europe as well as some impact of diversion in the US professional cryo market. Sameer Harish - Needham & Company, LLC : The relationship with SSL seems some quarters it is a good relationship, some quarters they under perform a little. Would you say this is more in regards to market share losses from competition or are they not meeting their distribution goals still?

Well we restructured the way we do the contract with them and we were supporting some advertising and promotional spend over there. That is no longer taking place and I think that frankly we have seen in other geographies around the world that this product is particularly sensitive to DTC promotion efforts and not doing that, we believe, is impacting the business there. Plus we have also seen evidence of some low cost competition coming in in addition to what the market had in 2008, which has impacted their sales ability as well. Sameer Harish - Needham & Company, LLC : Okay I got it, so less growth because of less advertising. Did Genomma already launch in Brazil or is that something that is up coming?

That is up coming so they hope to be on the shelves for the up coming summer season. Sameer Harish - Needham & Company, LLC : The sequential decrease in G&A was that tied to the legal primarily? Do you expect that to increase as legal increases?

Yes, I mean we do expect that we will see some increase as we move through and towards the Markman hearings on the legal spend side, you are absolutely right. Sameer Harish - Needham & Company, LLC : Okay fair enough. I want to follow up a little bit on the HCV. Can you give me a sense of what the target enrollment is for the two arms there, the venous side and then the oral and everything else?

The venous whole blood side because we are going to obviously be using some of the data that was generated in the previous study is going to be less than the enrollment for oral fluid and finger stick. It is going to be in the hundreds, 500 to 700 and on the finger stick and oral fluid it is going to be in the 2000 range. Sameer Harish - Needham & Company, LLC : Okay and is there anything substantially different in the oral and other side that when you compare versus other OraQuick trials that you have done in the past?

No not at all. The only difference is that by protocol those specimens are going to be collected and run and the results interpreted completely independent of one another by protocol and that is to absolutely eliminate and ensure that there is no “potential” for bias. Sameer Harish - Needham & Company, LLC : Okay I appreciate the update on the HIV side. Your comments pretty much answered all of my questions. I just have the one. Is there any other agenda that the FDA has for the November meeting? If you could talk a little bit about that I would appreciate it.

No, we have shared with you what we have learned from the FDA. It is pretty clear to us that before they give us their final guidance they want to run that by the advisory committee and our objective is to work with the FDA so that when we go together to that advisory committee we have as close to joint proposal as we possibly can for what remains yet to be done. Our objective is to get some definitive guidance on the remaining studies and also some clarity on what the success criteria is so that we can come home, develop the protocols per their direction, get them submitted, and execute on those plans. Sameer Harish - Needham & Company, LLC : Okay. Do you think reducing the size of the unobserved trial is still in the cards?

I don’t think that we necessarily speculated on that one way or the other. I think we have said previously that the value of including known HIV positives like we were asked to do in the observed use study, at least from our perspective, has less value in an unobserved study, but I the FDA wants us to do it we will debate that issue, but in the end it is going to be their call. We will do what they ask us to do and we will try to do it as quickly as possible. We want to get this product approved and on the market. Sameer Harish - Needham & Company, LLC : I appreciate the color on the impacts of manufacturing, as you said, on revenue. Could you give us kind of a similar indication on how it impacted gross margins and what it may have looked like in the quarter without the destruction?

Definitely there are impacts that we experienced in many areas: specifically scrap and spoilage, and also the amount of effort that was diverted by our internal staff towards working on the resolution of the manufacturing issue. Plus, overall we turned out and manufactured less product and so the actual unit cost would be higher for a product produced in the second quarter than it was in the first as a result of absorbing overhead over a lower number of units. So, I would comfortably say that we would be north of the 60% range that we had, not as high as the 64% that we had in the first quarter, but north of 60%, because we did see somewhat of a drag on gross margins in the cryo business which probably brought it down by 170 basis points versus the comparable period a year ago. That is related to the cryo sales themselves and the professional OTC market as well as the lower royalties that we enjoyed during the second quarter from our IT patent license with Schering-Plough for the sale of their cryo product in the US OTC market. Sameer Harish - Needham & Company, LLC : Okay great, thank you.

Your next question is a follow up from Aaron Lindberg - William Smith & Company. Aaron Lindberg - William Smith & Company : Have you added more chains beyond Rite Aid for the US OTC product?

We have cds.com and Lewis Drug out in the Midwest. Aaron Lindberg - William Smith & Company : Okay and the 510-K for the high through put assay, where are you at with the individual drugs on that one? Do we still have PHC and some things kind of lagging behind others?

We are right on track to our previous update. All of the assays, with the exception of PHC are either about to enter or have started the clinical studies. PHC is going to be delayed into 2010, but that program is on track and the results look very good. Aaron Lindberg - William Smith & Company : PHC delayed into 2010 before it goes into the clinic?

Yes. Aaron Lindberg - William Smith & Company : Okay and then what do you expect the cost of the additional HCV trials to be and is it fair to assume that you guys bear all of the expenses without any additional help from Sheering?

The latter observation is right on. We will bear all of those costs ourselves and frankly we are working through the total costs associated with those trials right now. Aaron Lindberg - William Smith & Company : Okay I think you had previously indicated that you had started the CLEO waiver work for HCV. Does that have to be redone or is that something that you can continue and submit along with the rest of the study data?

No, our intention was to be in the midst of conducting the CLEO waiver studies now, obviously, based on the old schedule. We will not begin those studies now until fourth quarter, first quarter 2010 and then, as you know, we can’t submit those studies until we have our PMA ultimately approved. Aaron Lindberg - William Smith & Company : Okay and then how have the HCV set backs impacted the relationship with Sheering?

They have not. The relationship with Sheering remains strong and I know both of us are very eager to get this product approved. Aaron Lindberg - William Smith & Company : Okay, awesome, thanks.

As it appears we have no further questions, Mr. Michels I will hand it back to you, sir, for any closing comments.

Okay, I just want to thank everyone for participating in today’s conference call, for your continued interest, obviously, in the Company, and for your continued support. I hope you all have a great afternoon and a good evening. Thanks everyone.

Ladies and gentlemen that does conclude the conference call for today. We thank you for your participation. (Operator Instructions)